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DFC predicts market growth, digital prominence

Analysts say download revenues to surpass traditional retail in 2013

A report from analyst company DFC Intelligence has predicted continuing growth for the games industry, powered by ascendant digital sales off-setting a shrinking market for boxed products.

The tipping point where digital content brings more revenue than boxed games will be 2013, said DFC in a report revealed to Gamasutra.

According to the report, traditional retail software raised $29.7 billion in revenues in 2010, 45 per cent of the industry total. Digital sales were responsible for $19.3 billion, 29 per cent of the total. The remaining 26 per cent, $17.5 billion, comes from hardware sales.

DFC sees that total of $66.5 billion growing to $77 billion by 2013, made up from $29.9 billion in digital sales and $27 billion in boxed titles. That trend will continue, the report says, resulting in a total market value of $81 billion - including $37.9 billion of digital sales.

"On a global basis it looks like retail delivery of physical software peaked in 2008," said David Cole of DFC, "We expect a slow, steady decline for physical game sales, with a steady increase for online delivery of games and new business models such as subscriptions and virtual item sales.

"Overall the game industry is becoming more diversified and global as it continues to grow. This makes the industry challenging because it is hard to know where to place one's bets. At the same time, there are many niches of opportunity that didn't exist in the past,"

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